Micron Technology on Thursday joined the ranks of Dell, Hewlett-Packard, and eBay in announcing plans to shed 15 percent of its work force to counter losses from declining demand amid the current stock market maelstrom.
“We are not immune to the difficult global market conditions that are affecting us all,” Micron CEO Steve Appleton said in a statement.
The layoffs come less than a month after Hewlett-Packard said it would let go of about 25,000 employees and just three days after eBay announced acquisitions and that it would trim 1,000 workers.
The global economic credit crisis and government bailout of U.S. financial giants is about to take a huge toll on IT-related companies with contracts in these Wall Street institutions. The pain will surely be felt as tech companies line up to report earnings in the next few weeks, when more heads should roll.
Among other concerns, Micron also blamed declining customer demand and a glut of products in the market pushing prices for its memory chips below manufacturing costs.
Micron said the restructuring is expected to save the company about $175 million next year, after spending about $60 million on the effort.
Shares of Micron were little changed Thurday.
Analysts predict that because of the weakening economy and the banking crisis more Silicon Valley workers will join the ranks of the 1,417,000-plus jobless Californians recorded by California Employment Development Department--a figure that tripled since August last year.
The number of statewide layoffs has Gov. Arnold Schwarzenegger worried.
“The credit crisis has frozen investment and commerce, forcing businesses and families to stop purchasing goods and services. This has resulted in tens of thousands of lost jobs and billions of dollars in lost tax revenue to the stat,” said Gov. Schwarzenegger in a letter to Treasury Secretary Henry Paulson last week.
Gov. Schwarzenegger might be rightfully anxious. The unemployment rate in Silicon Valley in August reached a four-year high at 6.5 percent, up from 6.4 percent in July and 6.0 percent in June, according to the latest data from the California Employment Development Department.